Among the companies supporting alternative payment services, PayPal Inc., a division of eBay Inc., remains the dominating force and continues to grow, new research from New York-based management-consulting firm Auriemma Consulting Group shows.
Auriemma conducted the research through an online survey of 417 U.S. adults in October. The company defines alternative payments as those initiated outside the traditional banking infrastructure.
The research found that 90% of survey participants were familiar with or use PayPal, up from 78% who said they were or did in a similar June 2008 survey involving 500 respondents.
In comparison, 32% of respondents were aware they could use Western Union as a payment method, down from 33% who were two years earlier, while 29% were aware of eBay’s Bill Me Later option, up from 20%. Only 21% of respondents knew about Google Inc.’s Google Checkout, up from 10% who were in 2008.
Of the participants aware of PayPal, 76% said they had a PayPal account, up from 55% who did in June 2008. Only 7% of survey participants said they had a Bill Me Later account, up from 4% two years earlier, while only 6% had a Google Checkout account, up from 3%.
Of the respondents who said they had a PayPal account, 90% said they use it at least once per year for personal reasons or to participate in online communities, according to the report.
PayPal remains the biggest alternative-payments player because other options, such as Google Checkout and Bill Me Later, have “not yet managed to grow as much share as PayPal,” Scott Strumello, an analyst for Auriemma, tells PaymentsSource. Moreover, in 2008 there were more alternative-payment start-ups, some of which have gone out of business, he adds.
PayPal may dominate the alternative-payments provider, but it is not impossible for other companies to compete, Strumello says.
“Google is a company with enormous resources. but they are competing more selectively in specific sectors such as the pharmaceutical space,” he notes. “[Google] is targeting areas where the company can compete effectively.”
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